Investments

I really wish someone had taught me investments 101 back, say, in my senior year of High School. You know, a course on what a stock is, what dividends are, what P/E, beta and EPS all means, and why it matters. And why DRIPS are pretty much what everyone should be doing.

Anyway, I spent a couple hours on Ameritrade last night, doing the research, reading up on the terminology (thanks Wikipedia) and figuring out just what I want to invest in. Here's what I've decided.

First, tech stocks are crap. In fact, any stock that doesn't pay dividends is crap. Google? Apple? Forget about them. They might be cool companies that do cool things, but they don't pay dividends.

Second, drip, drip, DRIP! There are a lot of good stocks out there that pay good dividends. Some of them are unexciting but steady - Coke, Pepsi, General Mills and so on. The Oil & Gas stocks can pay out great dividends, and many pay out monthly, but they're riskier. But, whatever path you choose, you should be reinvesting them back into your stock, not collecting the dividends. The goal is, basically, to setup a second paycheck for yourself.

So, this year, I'm going to pick about a dozen stocks, invest about $500/month, and see how I'm doing at the end of the year, and continue to track my progress afterwards. My first milestone will be when I collect enough in dividends per month to buy groceries - let's say $200/month. The second milestone will be the mortgage payment - about $1000/month. The final milestone will be the "I don't have to work any more if I really don't want to" - about $4000/month.

And, in case you're wondering about my portfolio, right now it's only 4 stocks - BMY, PEP, VNR and PBT.

Wish me luck.